People starting new jobs are receiving “steep increases in pay” as recruiters reported staff shortages among baristas for the first time, according to a closely watched survey of recruiters.
Salary increases for permanent workers accelerated in December after a slight slowdown in the previous month, according to a report by the Recruitment and Employment Confederation (REC) to be published today.
The REC’s index tracking salaries recorded by its recruiter members rose to 60.7 points in the month, far above the no-change 50 mark.
While the REC’s indicator adds yet more evidence of a tight labour market for employers, economists have been confounded by the lack of wage growth across the broader economy.
Kevin Green, REC chief executive, said: “Employers as a response to these candidate shortages are offering increased starting salaries to attract staff, but while this has been the case for some time it isn’t translating into significant wage growth across the economy yet.”
Wage growth has picked up since hitting its lowest point since 2015 in May of last year, at 1.9 per cent per year. However, even with October’s increase to 2.5 per cent, inflation has continued to cut real wages across the economy.
The availability of permanent staff fell for the 56th consecutive month, amid historically high employment levels. Employers have reported a shortage of candidates for niche, high-skilled roles, or those requiring detailed technical knowledge, for months, but the dearth of candidates has started to affect non-graduate jobs as well.
Nurses and medical staff remain the most in-demand, but shortages in the hospitality sector suggest future restrictions to immigration from the EU should be carefully weighed, according to Hadley.
“We need to maintain access to some of those staff in non-graduate roles,” he said, as well as allowing the “best and brightest” to work in the UK.
“If we haven’t got the staff to deliver, business growth will be impacted,” he added.